Thursday 1 December 2011 14.39 EST
First published on Thursday 1 December 2011 14.39 EST

A renewed pay crackdown on public sector workers will have "negative" consequences for talks over pension reform, the head of the TUC has warned, as discussions between the government and trade union leaders resumed in the wake of Wednesday's mass strikes.

Brendan Barber, the lead negotiator in talks with ministers, said the announcement of a further pay squeeze on public sector workers in the autumn statement had thrown up a new barrier to progress. "The landscape has been changed in a negative way by these arbitrary announcements in the autumn statement. In particular, the prospect of another period of rigid pay restraint means that real-terms pay cuts will continue. That is the worst possible background for considering these issues."

On Tuesday, George Osborne capped public sector pay rises at 1% a year during 2013 and 2014, following on from a two-year pay freeze. A major sticking point in pension negotiations is the plan for an increase in contributions – taken from employee pay packets – of £2.8bn by 2014/2015, which unions argue is an unacceptable burden for staff now facing four years of pay restraint.

Trade unions are in dispute with the government over changes to pension schemes for four groups of employees: health, education, the civil service and local government.

The government retained its hardline stance on the pensions dispute, saying improved terms offered last month will be removed by the end of the year unless a deal is reached by then. Number 10 said the government remained hopeful a deal could be reached, but insisted the threat of a withdrawal of the offer remained.

In the wake of claims and counter-claims over the scale of the walkouts, David Cameron conceded that the 24-hour walkout by public sector workers was "obviously a big strike", just a day after telling MPs that the day of action on Wednesday was a "damp squib".

The TUC had expected up to 2 million workers to go on strike and, with the number of teachers still unknown, unions are confident that the final tally will top 1 million, making Wednesday the biggest day of strike action since the late 1970s. Barber branded Cameron's "damp squib" jibe as "unworthy and condescending".

Ministers are hopeful some teaching unions will be willing to settle, and have adopted a more conciliatory tone to win them over. As teaching unions resumed talks over their pension schemes, one union leader said there was a greater urgency in talks between the teaching unions and government following the mass walkout. Russell Hobby, general secretary of the National Association of Head Teachers, said a meeting between Michael Gove, the education secretary, civil servants and teaching unions on Thursday had been "fairly positive".

"The rhetoric had stepped right up because of Wednesday's action and I sensed more urgency from government," he said.

Union leaders, Gove and officials discussed how sustainable the Teachers' Pension Scheme was and will meet again next week.

Gove described the discussions as "cordial and constructive". Senior union sources stressed it was much more likely that deals would emerge at around the same time, because to do otherwise would diminish their collective negotiating strength.

Health unions hold talks with officials on Friday , amid a hardening of opinions among members. Doctors, midwives and nurses at the Royal College of Nursing, British Medical Association and Royal College of Midwives have warned this week they may ballot members on industrial action – joining members of Unison and Unite who joined this week's walkouts – if pension talks failed to yield progress. National-level talks, led by Barber, with Francis Maude, the cabinet secretary, and Danny Alexander, chief secretary to the Treasury, have yet to be scheduled.